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L&T Downgrade #18: Rectangle Breakout. Sell. Arijit Banerjee

OUR RECOMMENDATION

CMP#1317.9
IdeaSELL
Sell Range1352 – 1313
Target*1205 – 1190
StopLoss**1367
Duration15 – 20 Trading Sessions
Downside Potential11 – 12%
CMP#IdeaSell RangeTarget*StopLoss**DurationDownside Potential
1317.9SELL1352 – 13131205 – 1190136715 – 20 Trading Sessions11 – 12%

# CMP on 18th Jan, 2019
* Use trailing StopLoss to accumulate profit.
** Adjust StopLoss on daily closing basis. 

COMPANY OVERVIEW

Larsen & Toubro Ltd, a large cap company, incorporated in 1946, having business in construction, engineering, manufacturing, trading, Finance and Technology services worldwide. Headquartered in Mumbai, this infrastructure company has integrated capabilities to deliver an entire value chain, from design to delivering a project. In Q3FY19 the company’s net income was improved by 21%YOY to Rs.96,073 crore and Net Profit increased by 30% YOY to Rs.5,486 crore.

Stock Data
NSE CodeLT
SectorNifty Infra
52 Week High1800.60
52 Week Low730.70
Relative Performance_L&T vs Nifty Infra Index

TECHNICAL OBSERVATIONS (WEEKLY)

  • Price made near all time high on February 01, 2018. Since then the trend is going downwards.
  • Price is moving in a falling channel trend. Every time the price is near the upper Resistance, price start falling.
  • In November 2018 there is a false breakout with ever decreasing volume.
  • 14th January 2019: Price falls below the resistance line. A fresh short will be a good idea from here.
L&T Weekly
L&T Weekly

TECHNICAL OBSERVATIONS (DAILY)

  • Candlestick pattern is showing bearishness.
  • ADX has turned bearish on daily charts.
L&T Daily
L&T Daily

MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

The research analysis is prepared by Arijit Banerjee, CMT, CFTe. He is a veteran trader and an active investor having in-depth knowledge in financial market research, advanced technical analysis, market cycle, algorithmic trading and portfolio management. Arijit is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts, USA. SEBI, the regulatory body of Indian financial market also recognizes him as a Research Analyst (INH300006582).

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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